Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;
The National Assembly promulgates the Law on Public Debt Management.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Law provides for the management of public debts, which covers the borrowing, use of loans and debt payment and public debt management operations.

2. Public debts under this Law comprise: a/ Government debts;

b/ Government-guaranteed debts; c/ Debts of local administrations.

Article 2.Subjects of application

This Law applies to organizations and individuals involved in the borrowing, use of loans, debt payment and public debt management.

Article 3.Interpretation of terms

In this Law, the terms below are construed as follows:

1. Debt means a loan to be repaid, including the principal, interests, charges and other related expenses at a point of time, which arises from the borrowing by a borrower that is permitted to take loans under the law of Vietnam.

2. Government debt means a debt arising from a domestic or foreign loan which is signed or issued in the name of the State or the Government or a loan signed or issued by or under the authorization of the Ministry of Finance under law. Government debts do not include debts issued by the State Bank of Vietnam to implement monetary policies in each period.

3. Government-guaranteed debt means a domestic or foreign loan borrowed by an enterprise or financial or credit institution under the Government's guarantee.

4. Debt of local administration means a debt signed or issued by or under the authorization of the People's Committee of a province or centrally run city (below referred to as provincial-level People's Committee).

5. National foreign debts means the total of foreign debts of the Government, government-guaranteed debts and debts borrowed and paid by enterprises and other organizations themselves under the law of Vietnam.

6. Borrowing means the process of creating the debt payment liability through the conclusion and performance of a loan treaty, contract or agreement (below referred to as loan agreement) or issuance of debt instruments.

7. Borrower means the borrowing party in a loan agreement or the issuer of a debt instrument that is liable for repaying the principal to the lender according to the conditions and terms of the loan agreement or the issuance.

8. Borrower of government loan (below referred to as sub-borrower) means an enterprise, financial or credit institution, or provincial-level People's Committee which signs an onlending agreement and acknowledges debts with the onlending agency to use the Government's loan under the onlending mechanism.

9. Guaranteed borrower means a borrower who is guaranteed by the Government. Guaranteed borrowers include those receiving the lawful transfer from borrowers under the guarantor's approval.

10. Short-term loan means a loan with a term of less than one year.

11 Medium- or long-term loan means a loan with a term of one year or more.

12 Foreign loan means a short, medium or long-term loan with or without interest borrowed by the State or Government or an enterprise or organization of Vietnam from a foreign government, territory, organization or individual or an international financial organization.

13. Official Development Assistance (ODA) loan means a loan borrowed in the name of the Vietnamese State or Government from a donor being a foreign government, bilateral donor organization, transnational organization or inter­governmental organization with non-refundable funds (preferential component) accounting for at least 35% for a binding loan, and 25% for a non-binding loan.

14. Concessional loan means a loan which is provided under conditions more preferential than those for a commercial loan, but its preferential component does not reach the level set for ODA loans.

15. Commercial loan means a loan provided under market conditions.

16. Debt instrument means a bill, draft, bond, public bond or other instrument which gives rise to a debt payment liability.

17. Government bond means a bond issued by the Ministry of Finance to raise funds for the state budget or a specific work or investment project.

18. Government-guaranteed bond means a bond with a term of one year or more which is issued by an enterprise to raise funds for an investment project under the Prime Minister's designation and guaranteed by the Government.

19. Bond of local administration means a bond with a term of one year or more, which is issued by or under the authorization of a provincial-level People's Committee to raise funds for local works and investment projects.

20. Debt payment means the payment of a due debt, including the principal, interests, charges and other related expenses arising from the borrowing.

21. Debt refinancing means new borrowing to pay one or many existing debts.

22. Debt restructuring means the performance of operations in order to change the conditions and terms of an existing debt without creating a new debt payment liability.

23. Debt portfolio restructuring means the performance of operations in order to restructure each debt in a debt portfolio, including debt refinancing, debt transfer and sale, currency swap, interest rate and other operations to mitigate debt payment liabilities and restrict risks.

25. Onlending agency means the Ministry of Finance or a financial or credit institution authorized by the Ministry of Finance to re-lend the Government's foreign loans.

26. Government guarantee means the Government's commitment with the lender to fulfill the debt payment liability in case a borrower fails to fulfill or fully fulfill the debt payment liability for a debt due.

27. Projected debt liability means a debt obligation which has not arisen but is likely to arise when occurs at least one of specified conditions.

29. Debt limit against the gross domestic product (GDP) means the maximum ratio of outstanding debts to GDP in each period.

Article 4.Contents of state management of public debts

1. To elaborate, promulgate and implement legal documents on public debt management.

2. To set and promulgate debt safety norms, objectives and orientations for loan raising and use and public debt management in each period: a system of indicators to control government debts, public debts and national foreign debts and detailed annual plans on borrowing and debt payment.

3. To raise, allocate and use loans and manage public debts properly and efficiently and assure the fulfillment of the debt payment liability.

4. To supervise the raising, allocation and use of loans and debt payment, to manage public debts and fiscal risks, to ensure debt safety and national financial security.

5. To evaluate the effectiveness of loan use and public debt management.

6. To sum up report and publicize information on public debts.

7. To propagate and disseminate policies and laws on public debt management.

8. To inspect and examine the observance of the law on public debt management.

9. To handle violations and settle complaints and denunciations in the implementation of the law on public debt management.

10. To train personnel in public debt management operations.

11. To carry out international cooperation in public debt management.

Article 5.Principles for public debt management

1. The State uniformly and comprehensively manages public debts, from raising, allocation and use of loans to debt payment.

2. To ensure debt safety within the limit approved by competent authorities, national financial security and macro-economic balance.

3. To ensure effective borrowing and use of loans; not to borrow short-term loans for long-term investment. To use foreign commercial loans only for programs and projects capable of direct capital recovery and assuring solvency.

5. To ensure publicity and transparency in the raising, allocation and use of loans, debt payment and public debt management. Programs and projects using loans of the Government or local administrations are subject to audit by the State Audit or an independent audit institution.

6. All debt liabilities of the Government are treated equally.

Article 6.Prohibited acts in public debt management

1. Raising funds ultra vires or for improper purposes.

2. Deciding on the lending and onlending or grant government guarantee ultra vires, for improper purposes or to improper persons.

3. Using loans unlawfully, wastefully or improperly.

4. Taking advantage of one's position and powers to appropriate, misuse or cause loss of, loans.

5. Colluding with others or being irresponsible in evaluation work.

6. Obstructing the control, inspection, examination and handling of violations of the law on public debt management.

7. Failing to supply or fully, promptly and accurately supply information on public debts under law.

Chapter II

TASKS AND POWERS OF THE NATIONAL ASSEMBLY, THE GOVERNMENT AND OTHER STATE AGENCIES AND RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS IN PUBLIC DEBT MANAGEMENT

Article 7.Tasks and powers of the National Assembly

1. To decide on debt safety norms in five-year socio-economic development plans, including:

a/ Public debts against GDP;

b/ National foreign debts against GDP;

c/ Payment of government debts against total state budget revenues;

d/ Payment of national foreign debts against total export value.

2. To decide on objectives and orientations for loan raising and use and public debt management for each five-year period to assure debt safety norms.

3. To decide on total annual loan and borrowing structure and debt payment of the Government in connection with state budget estimates.

4. To decide on in-principle approval of investment in key national projects and works funded by the Government's loans.

5. To supervise the raising, allocation and use of loans, debt payment and public debt management.

Article 8.Tasks and powers of the Government

1. To perform unified state management of public debts, to define responsibilities of each agency and coordination responsibilities of line management agencies and local administrations in public debt management.

2. To submit to the National Assembly debt safety norms; objectives and orientations for loan raising and use and public debt management in each five-year period; and annual total loan and borrowing structure and debt payment of the Government in connection with state budget estimates.

3. To decide on specific policies and solutions to ensure debt safety norms under Clause 1, Article 7 of this Law.

4. To approve on schemes on issuance of the Government's international bonds; to decide on the negotiation and conclusion of agreements on foreign borrowing by the Government.

5. To inspect and examine the raising, allocation and use of loans, debt payment and public debt management; to report to the National Assembly and the National Assembly Standing Committee on loan use and public debt management and the implementation of key national projects and works and other important socio-economic development programs using the Government's loans.

Article 9.Tasks and powers of the Prime Minister

1. To approve detailed annual borrowing and debt payment plans on the basis of the Government's annual total loan limit, borrowing structure and debt payment decided by the National Assembly under Clause 3, Article 7 of this Law, covering the following major contents:

a/ The Government's plans on borrowing from domestic and foreign sources and use objectives, excluding short-term loans to offset temporary state budget deficits;

2. To approve medium-term debt management programs for three subsequent consecutive years to materialize objectives and orientations for loan raising and use and public debt management decided by the National Assembly under Clause 2. Article 7 of this Law, covering the following major contents:

h/ Policies and legal documents to be promulgated to raise the effectiveness of public debt management.

3. To approve lists of ODA fund requests.

4. To decide on contents of treaties on the Government's foreign borrowing.

5. To approve schemes on issuance of government bonds to raise funds for domestic works and investment projects and fund raising schemes and plans on use of foreign commercial loans.

6. To approve schemes to handle debts and restructure debts and debt portfolios.

7. To decide on allocation or onlending of the Government's foreign loans to programs and projects.

8. To decide on provision of government guarantee.

9. To direct inspection and examination of the observance of the law on public debt management.

Article 10.Tasks and powers of the Ministry of Finance

1. To assist the Government in performing the unified state management of public debts.

2. To assume the prime responsibility for setting objectives and orientations for loan raising and use and public debt management in each five-year period; formulating medium-term debt management programs; and establishing systems of indicators to monitor government debts, public debts, national foreign debts and the Government's detailed annual borrowing and debt payment plans and submit them to competent authorities for approval.

3. To implement public debt limits, foreign commercial loan limits and government guarantee.

4. To negotiate and sign foreign loan agreements as assigned by the Government.

5. To act as the official representative of borrowers for foreign loans taken in the name of the State and the Government, except loans which the State Bank of Vietnam is authorized to negotiate and sign; to conduct government debt-related transactions.

6. To negotiate and sign government guarantee agreements; to act as the official representative of the guarantor for government-guaranteed loans.

7. To assume the prime responsibility for formulating schemes to issue the Government's international bonds and submit them to the Government for approval.

8. To assume the prime responsibility for formulating schemes on issuance of government bonds to raise funds for domestic works and investment projects and schemes to raise and plans to use foreign commercial loans and submit them to the Prime Minister for approval.

9. To issue domestic and international government bonds under approved plans or schemes.

a/ To formulate and promulgate regulations on financial management of loans;

b/ To allocate the Government's loans to investment programs and projects and other targets already approved by competent authorities; to guide and organize the onlending of the Government's foreign loans.

12. To evaluate dossiers of request for government guarantee, schemes to issue government-guaranteed domestic and international bonds of enterprises and financial and credit institutions and submit them to the Prime Minister for decision on provision and management of government guarantee.

13. To fulfill the Government's debt payment liability and the guarantor's obligations for government-guaranteed loans.

14. To manage public debts portfolios, to analyze sustainable debts and control risks; to propose or submit to the Prime Minister for approval and implement schemes to handle debts and restructure debts and debt portfolios.

15. To manage the accumulation fund for debt payment.

16. To establish and manage a database on public debts; to sum up, report and publicize information on public debts.

17. To assume the prime responsibility for. and coordinate with onlending agencies and other concerned agencies in. setting specific onlending conditions for programs and projects using foreign loans under law.

18. To authorize financial and credit institutions to provide onlending for or sign onlending agreements with sub-borrowers when the Ministry of Finance is the direct onlending provider.

19. To monitor, inspect, examine and evaluate the use of loans of or guaranteed by the Government; to borrow loans for and pay debts of local administrations; to manage and recover onlending loans under regulations on authorization of onlending and onlending agreements.

20. To coordinate with the State Bank of Vietnam in raising domestic funds, ensuring effective administration of monetary-credit policies.

21. To coordinate with the Ministry of Planning and Investment in formulating and submitting to the Prime Minister for approval a list of ODA fund requests before a framework agreement on ODA loans or project list agreement is signed.

22. To report on the use of loans and management of public debts to competent authorities annually or at request.

Article 11.Tasks and powers of the Ministry of Planning and Investment

1. To assume the prime responsibility for making ODA fund request lists as assigned by the Government.

2. To raise and coordinate ODA funds and assume the prime responsibility for negotiating and signing framework treaties on ODA loans as assigned or authorized by the Prime Minister.

3. To monitor and conduct post-evaluation of the Government's ODA-funded programs and projects.

4. To coordinate with the Ministry of Finance in:

a/ Setting objectives and orientations for loan raising and use and public debt management in each five-year period; and formulating medium-term debt management programs and detailed annual borrowing and debt payment plans of the Government;

b/ Establishing a system of indicators to oversee government debts, public debts and national foreign debts;

c/ Formulating schemes to issue international bonds of the Government;

d/ Formulating schemes to issue domestic central work bonds and schemes to raise and use foreign commercial loans;

e/ Balancing ODA funds in annual state budget estimates for programs and projects.

Article 12.Tasks and powers of the State Bank of Vietnam

1. To assume the prime responsibility for, and coordinate with the Ministry of Finance and other concerned agencies in, preparing contents of, negotiating and signing treaties with international financial and monetary institutions which the State Bank of Vietnam represents and acts as the official representative of borrowers in these treaties under the assignment or authorization of the President or the Government.

2. To evaluate schemes to borrow the Government's foreign commercial loans under credit programs and limits and government-guaranteed commercial loans of financial and credit institutions.

3. To guide and organize the registration of government-guaranteed foreign loans of enterprises and financial and credit institutions.

4. To coordinate with the Ministry of Finance in:

a/ Setting objectives and orientations for loan raising and use and public debt management in each five-year period; and formulating medium-term debt management programs and detailed annual borrowing and debt payment plans of the Government;

b/ Establishing a system of indicators to oversee government debts, public debts and national foreign debts;

Article 13.Tasks and powers of ministries and ministerial-level agencies

1. Within the ambit of their tasks and powers, to perform the state management of public debts as assigned by the Government.

2. To approve schemes on borrowing and issuance of bonds guaranteed by the Government; and schemes to borrow the Government's loans according to their competence before sending them to the Ministry of Finance for evaluation.

3. To monitor, inspect and examine the use of loans and bond issuance of their attached units and report and supply information on public debts.

1. To elaborate detailed annual borrowing and debt payment plans of provincial-level People's Committees and submit them to provincial-level People's Councils for approval.

2. To make lists of provincially invested projects funded by the Government's foreign loans and domestic loans under the State Budget Law and submit them to provincial-level People's Councils for decision.

3. To elaborate plans on borrowing loans for investment under the State Budget Law. and schemes on borrowing, bond issuance and debt payment, submit them to provincial-level People's Councils for decision and send them to the Ministry of Finance and the Ministry of Planning and Investment for monitoring and sum-up. For cases of bond issuance, bond issuance schemes are subject to prior written approval of the Ministry of Finance.

4. To issue bonds of local administrations, to borrow loans from other lawful financial sources and the Government's foreign loans under Article 40 of this Law.

5. To examine and urge the use of loans taken from the Government's borrowing, and issuance of bonds of local administrations and capital recovery; to report and supply information on public debts.

6. To allocate funds from provincial-level budget balances and recovery of local investment projects to guarantee full payment of due debts.

Article 16.Tasks and powers of agencies and organizations receiving and using loans or guaranteed to borrow loans

Agencies and organizations receiving and using loans or guaranteed to borrow loans shall ensure the efficient and proper use of loans and fully fulfill related liabilities arising from loan or guarantee agreements.

Article 17.Responsibilities of organizations and individuals deciding on lending, onlending, guarantee and evaluation, and other concerned organizations and individuals

1. Organizations and individuals that decide on the lending, onlending, guarantee and evaluation and other concerned organizations and individuals shall, within the ambit of their tasks and powers, take responsibility before law for their performance of assigned tasks and vested powers under the law on public debt management.

2. Organizations and individuals that take advantage of their assigned tasks and vested powers to commit prohibited acts in state management of public debts shall, depending on the nature and severity of their violation, be handled under law.

Chapter III

MANAGEMENT OF GOVERNMENT DEBTS

Article 18.Purposes of the Government's borrowing

1. To invest in socio-economic development within the central budget spending task under the State Budget Law.

2. To offset temporary state budget deficits with short-term loans.

3. To restructure government debts and debt portfolios and government-guaranteed debts.

4. To provide onlending to enterprises, financial and credit institutions and local administrations under law.

5. Other purposes to assure national financial security.

Article 19.Forms of government borrowing

1. The Government may borrow through the issuance of debt instruments and signing of loan agreements within the Government's annual borrowing limits and structure and debt payment already decided by the National Assembly.

2. The Government may borrow in local and foreign currencies, gold or goods of local or foreign currency equivalence.

Article 20.Domestic borrowing

1. The Government may borrow domestic loans through the issuance of debt instruments and signing of borrowing agreements.

2. The Ministry of Finance is the agency to issue debt instruments of the Government under Clause 1 of this Article.

3. The Ministry of Finance shall sign agreements to borrow domestic loan from lawful financial sources under the State Budget Law within the Government's detailed annual borrowing and debt payment plans.

4. The Government shall detail the issue of the Government's debt instruments and management of domestic borrowing.

Article 21.Foreign borrowing

1. The Government may borrow foreign loans through the issuance of international government bonds and loan agreements.

2. The Ministry of Finance is the agency to issue the Government's international bonds. Such bonds may be issued only when the following conditions are satisfied:

a/ Programs and projects using funds from the issuance of international bonds are determined as key national projects; and effective investment programs and projects having completed investment procedures under the investment law and other relevant laws;

b/ The conditions specified in the Government's resolution on issuance of international bonds are satified;

c/ Legal dossiers of international bond issuance have been completed according to Vietnam's law and international practice;

a/ For ODA loans, the Ministry of Planning and Investment shall assume the prime responsibility for raising and making lists of request for ODA funds, negotiating and signing framework ODA loan treaties, allocating ODA funds to programs and projects and managing the funding source. The Ministry of Finance shall assume the prime responsibility for negotiating and signing specific loan agreements. When the State Bank of Vietnam is assigned by the Government to negotiate and sign loan agreements, it shall forward such signed agreements to the Ministry of Finance for implementation;

b/ For borrowing not under ODA conditions, the Ministry of Finance shall assume the prime responsibility for negotiating and signing loan agreements under the Governme